How often Partnership financial statements is asked

Where it was asked

• May/Jun 201422 marks
• Oct/Nov 201319 marks
• May/Jun 201320 marks

The questions

1. May/Jun 2014, Q1.112 marks

   Grove and Steenkamp started a partnership trading as GroStamino Traders, manufacturing and selling energy-enhanced supplements for athletes. The trial balance at 28 February 2014 reflects: capital – Grove R225 000; capital – Steenkamp R525 000; current account – Grove (debit) R60 000; current account – Steenkamp (credit) R80 000; mortgage R1 500 000; long-term loan – Grove R250 000; creditors control R85 000; accrued expenses (insurance) R11 500; bank overdraft R110 000; land and buildings at cost R1 750 000; equipment at cost R250 000; vehicles at cost R350 000; accumulated depreciation on equipment R75 000; accumulated depreciation on vehicles R85 000; inventory R15 000; debtors control R535 000; allowance for credit losses R5 500; petty cash R7 500; and profit for the year before year-end adjustments R15 500. The partnership agreement provides that: (1) partners share profits and losses in the ratio of their fixed capital balances; (2) interest of 7% per annum is calculated on the partners' current account balances; and (3) each partner is entitled to an annual salary of R60 000. The following year-end matters must also be taken into account: the long-term loan from ABA Bank was acquired on 1 July 2013 at 12% per annum interest, payable annually on 30 June, is secured by a first mortgage over the land and buildings, and is repayable in ten equal annual instalments starting 30 June 2014; Grove granted the partnership an unsecured loan on 1 January 2014, bearing interest at 15% per annum payable on 31 December each year (interest for the current financial year still has to be provided for), with the full capital amount repayable on 31 December 2018; during the year each partner withdrew a total of R45 000 from the partnership; and on 3 March 2014 an invoice of R25 000 was received from a local supplier for inventory delivered on 28 February 2014, which had not yet been recorded in the partnership's accounting records. Answers must comply with International Financial Reporting Standards (IFRS) appropriate to the partnership's business, comparative figures are not required, and all calculations must be shown. Prepare the EQUITY section of the statement of financial position of GroStamino Traders as at 28 February 2014.

2. May/Jun 2014, Q1.210 marks

   Grove and Steenkamp started a partnership trading as GroStamino Traders, manufacturing and selling energy-enhanced supplements for athletes. The trial balance at 28 February 2014 reflects: capital – Grove R225 000; capital – Steenkamp R525 000; current account – Grove (debit) R60 000; current account – Steenkamp (credit) R80 000; mortgage R1 500 000; long-term loan – Grove R250 000; creditors control R85 000; accrued expenses (insurance) R11 500; bank overdraft R110 000; land and buildings at cost R1 750 000; equipment at cost R250 000; vehicles at cost R350 000; accumulated depreciation on equipment R75 000; accumulated depreciation on vehicles R85 000; inventory R15 000; debtors control R535 000; allowance for credit losses R5 500; petty cash R7 500; and profit for the year before year-end adjustments R15 500. The partnership agreement provides that: (1) partners share profits and losses in the ratio of their fixed capital balances; (2) interest of 7% per annum is calculated on the partners' current account balances; and (3) each partner is entitled to an annual salary of R60 000. The following year-end matters must also be taken into account: the long-term loan from ABA Bank was acquired on 1 July 2013 at 12% per annum interest, payable annually on 30 June, is secured by a first mortgage over the land and buildings, and is repayable in ten equal annual instalments starting 30 June 2014; Grove granted the partnership an unsecured loan on 1 January 2014, bearing interest at 15% per annum payable on 31 December each year (interest for the current financial year still has to be provided for), with the full capital amount repayable on 31 December 2018; during the year each partner withdrew a total of R45 000 from the partnership; and on 3 March 2014 an invoice of R25 000 was received from a local supplier for inventory delivered on 28 February 2014, which had not yet been recorded in the partnership's accounting records. Answers must comply with International Financial Reporting Standards (IFRS) appropriate to the partnership's business, comparative figures are not required, and all calculations must be shown. Prepare the 'FINANCIAL LIABILITIES' note to the financial statements of GroStamino Traders for the year ended 28 February 2014.

3. Oct/Nov 2013, Q119 marks

   Ez Lewinsky and Dez Montreal trade in partnership as EzDez Traders. Their pre-adjustment trial balance as at 30 June 2013 shows the following: capital account of Ez Lewinsky R180 000 (credit) and capital account of Dez Montreal R180 000 (credit); current account of Ez Lewinsky R51 120 (debit) as at 1 July 2012 and current account of Dez Montreal R35 280 (credit) as at 1 July 2012; drawings during the year of R45 540 for Ez Lewinsky and R28 980 for Dez Montreal; an asset replacement reserve of R34 000 as at 1 July 2012; a long-term loan from Ez Lewinsky of R73 620; furniture and equipment at cost of R450 000 with accumulated depreciation at 30 June 2013 of R72 900; inventory of R295 540; trade and other receivables of R279 000; allowances for credit losses of R17 352; trade and other creditors of R174 240; a bank overdraft of R27 900; and profit for the year before year-end adjustments of R354 888, giving trial balance totals of R1 150 180 on each side. An extract from the partnership agreement states: (1) interest on capital is calculated at 10% per annum and interest on current accounts at 10% on their opening balances, with both types of interest capitalised to the partners' current accounts; (2) interest is charged at 5% per annum on the closing balance of each partner's drawings account at the end of the financial period, and this interest must also be capitalised against the current accounts; (3) partner salaries are payable at R97 500 per annum to Ez Lewinsky and R120 000 per annum to Dez Montreal; (4) an amount equal to 15% of the profit for the year, before appropriations, must be set aside as an asset replacement reserve; and (5) profits and losses are shared equally between the partners. The following year-end adjustments must still be taken into account: (1) on 1 January 2013 Ez Lewinsky contributed a further R60 000 to the partnership, which was agreed to form part of his fixed capital account, and this transaction has already been correctly recorded in the accounting records as at 30 June 2013; (2) the salaries paid to the partners were included in the profit for the year ended 30 June 2013, amounting to R97 500 for Ez Lewinsky and R75 000 for Dez Montreal; (3) the rent payable for June 2013, at a monthly rate of R15 000, is still outstanding; (4) Ez Lewinsky granted an unsecured loan to the partnership on 1 January 2013, bearing interest at 10% per annum, with the full amount repayable on 30 June 2018; and (5) interest on the bank overdraft amounting to R2 787 still needs to be recorded. Using the information given about EzDez Traders (the partnership of Ez Lewinsky and Dez Montreal), prepare the statement of changes in equity for the year ended 30 June 2013. The statement must comply with the requirements of International Financial Reporting Standards (IFRS) as appropriate to a partnership business. Comparative figures may be ignored and the total column of the statement may be omitted. All calculations must be shown.

4. May/Jun 2013, Q120 marks

   Williston Traders is a partnership between Bussie and Bettie, and the information below relates to its business activities for the year ended 28 February 2013. The trial balance as at 28 February 2013 reflects: Capital: Bussie R200 000; Capital: Bettie R100 000; Current account: Bussie (credit, 1 March 2012) R30 000; Current account: Bettie (debit, 1 March 2012) R5 000; Drawings: Bussie R4 800; Drawings: Bettie R3 200; Creditors control R56 300; Bank (debit) R36 617; Land and buildings at cost R253 000; Equipment at cost R94 000; Vehicle at cost R98 000; Accumulated depreciation: Equipment (1 March 2012) R29 400; Accumulated depreciation: Vehicles (1 March 2012) R12 250; Inventory (1 March 2012) R15 500; Debtors control R20 500; Petty cash R1 500; Investment at cost R100 000; Loan to Bussie R99 000; Loan from Bettie R98 000; Asset replacement reserve R30 000; Sales R649 000; Purchases R320 000; Salaries R132 000; Interest on loan to Bussie R9 075; Water and electricity R4 700; Settlement discount granted R3 800; Stationery R5 000; Telephone expense R6 208; Insurance R8 000; and Freight on sales R3 200. The partnership agreement provides that Bussie and Bettie share profits and losses in the ratio 2:1 respectively, that interest is calculated at 10% per annum on the opening balances of the partners' capital and current accounts, and that both partners are entitled to a monthly salary of R5 000 each. Additional information: Bussie and Bettie are the only staff members of Williston Traders; on 28 February 2013 inventory on hand amounted to R10 000; on 31 May 2012 equipment with a cost price of R24 000 and accumulated depreciation of R14 000 (as at 1 March 2012) was sold on credit for R12 000, and the transactions relating to this sale still need to be recorded; depreciation still has to be provided for on vehicles at 25% per annum on the straight-line method and on equipment at 10% per annum on the diminishing-balance method; Bettie granted an unsecured loan to the partnership on 1 January 2013, on which interest at 15% per annum is charged and capitalised to the loan, with the total amount plus interest repayable on 31 December 2025; the partnership granted Bussie a loan on 1 January 2010, repayable on 31 December 2020, with interest charged at 11% per annum payable annually on 31 December, and Bussie paid the interest due on 31 December 2012, which was recorded in the partnership's accounting records; and the investment consists of 25 000 ordinary shares in Klipbak Ltd, purchased on 10 June 2012, with the fair value of these shares on 28 February 2013 determined at R88 000. Prepare the statement of profit or loss and other comprehensive income of Williston Traders for the year ended 28 February 2013, ensuring that your answer complies with the requirements of International Financial Reporting Standards as applicable to the partnership's business. Notes and comparative figures are not required, but all calculations must be shown.